Hydro One CEO Laura Formusa stepping down

Hydro One CEO Laura Formusa is stepping down after five years in the job.

Laura Formusa, who took over the top job in 2007, joined Hydro One in 1980 after finishing law school and being admitted to the bar.

By:John SpearsBusiness Reporter, Published on Thu Sep 20 2012

Ontario’s giant electricity company Hydro One is looking for a new chief executive.

Laura Formusa is stepping down as Hydro One’s CEO, the company confirmed Wednesday.

It wasn’t saying much else, however.

When asked about Formusa’s departure, the company replied with two terse sentences:

“As the search process is underway, it would inappropriate for the company to comment. An announcement will be made in due course.” It gave no departure date.

Formusa, who took over the top job in 2007, joined Hydro One in 1980 after finishing law school and being admitted to the bar.

Her departure from the provincially-owned company comes just as new talk is beginning to surface about privatizing parts of Ontario’s electricity system.

Hydro One, which had revenue of $5.471 billion in 2011, owns and operates most of Ontario’s long-distance electricity transmission wires that carry power from generating stations to local utilities.

It also owns the wires that deliver power directly to homes and businesses in most of rural Ontario, as well as owning dozens of local hydro utilities — the biggest being Brampton’s. It has 5,428 full time employees.

The utility is under pressure to install new wires to connect wind and solar power projects to the grid. Some projects are stalled because they’re in rural areas where the existing wires can’t handle the new supply.

But significant changes could be in store for the company.

A three-man panel is currently examining the future of the local hydros. Like Hydro One’s distribution network, the local hydros deliver power directly to custsomers. Most of the local hydros not owned by Hydro One are owned by towns and cities.

An umbrella lobby group for the energy sector has suggested that private investment is needed to modernize the sector.

Whether privatized or not, the province wants to reduce the ranks of Ontario’s 75 local utilities. Combining the local utilities’ operations with those of Hydro One in some form is a good possibility.

To top it off, Hydro One’s two biggest labour contracts also expire in 2013.

The new CEO will have to steer a careful path of running the company and advising a provincial government that may want to hive off part of the business that Hydro One now runs.

It won’t be the first time the company has faced a change of ownership.

The Conservative government of Mike Harris proposed privatizing Hydro One holus bolus, and only backed down after two unions successfully challenged the sale in court.

Formusa’s reign at Hydro One was a relatively smooth one. Both her predecessors — Eleanor Clitheroe and Tom Parkinson — exited after becoming embroiled in politically-charged expense account controversies.

Formusa’s pay was trimmed from her predecessors’ when she took over; they had each made about $1.6 million annually; Formusa earned $954,875 in 2011.

Who might succeed her?

The search is likely to be a wide one. Formusa’s predecessor Parkinson had been recruited to Hydro One from Australia.

Speculation making the rounds inside the industry includes both insiders and outsiders. Among them;

• Peter Gregg. Gregg is currently executive vice president of operations for Hydro One.

• Brian Bentz, currently chief executive of PowerStream. He’s a well known figure in the industry, and is acting chair of the Ontario Energy Association, which has called for more private investment in the power sector.

• Colin Andersen, who heads the Ontario Power Authority; or Paul Murphy, who heads the Independent Electricity System Operator. The two agencies are being merged into one, so either Andersen or Murphy will be job hunting when the merger goes through.

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